Hammond told Davos he wants "very modest changes" to the current UK-EU relationship.

Leading Brexiteers attack the chancellor's "puzzling" comments.

Pro-Brexit Conservative backbenchers are becoming increasingly frustrated with the government.

LONDON — Chancellor Philip Hammond enraged Brexit-supporters today after he saying that Brexit would only lead to "very modest" changes to Britain's current relationship with the European Union.

Speaking at the World Economic Forum in Davos on Thursday, the chancellor called for the "closest possible relationship between the EU and the UK post-Brexit".

The comments triggered an immediate backlash, with leading Brexit-supporter Jacob Rees-Mogg saying he "profoundly disagreed" with the Chancellor's commnets.

Hammond suggested that the UK-EU relationship will look very similar to Britain's current EU membership in trade, customs and legal terms.

"We are taking two completely interconnected and aligned economies with high levels of trade between them, and selectively, moving them, hopefully very modestly, apart," Hammond told political and business figures from around the world.

He added: "In my opinion, starting with what we have got and working out what we need to subtract to get to a workable future model that respects everybody's red lines is a more preferable way forward than starting with a blank sheet of paper which is what the Canada model would entail."

He paid tribute the speech CBI director-general Caroline Fairbairn gave earlier this week which called for Britain to remain in the customs union after it leaves the EU.

"I welcomed Carolyn Fairbairn's speech on Monday this week. For the contribution it made to the ongoing debate," he said.

He also suggested that current immigration rules are likely to be little changed.

"We want to maintain the closest possible relationship in people to people exchanges," he said.

A spokesperson for the prime minister declined to distance her from Hammond's comments in a briefing on Thursday afternoon.

Former Cabinet minister and leading Brexiteer Iain Duncan Smith told the BBC that he was "puzzled" by Hammond's comments.

"In our manifesto we were very clear, and the public voted, for two parties that said they were leaving the customs union and leaving the single market, they were not going to have freedom of movement because we were also going to take back control of our borders and out laws. All of that was very explicit in the manifesto signed up to by the government."

"That means quite substantial change, not minor change."

Leading Tory Brexiteers Jacob Rees-Mogg said he "profoundly disagrees" with the comments.

Rees-Mogg on Wednesday accused Brexit Secretary David Davis of being "weak" and turning Britain into a "vassal state" by keeping it closely-wedded to EU transitions during the proposed two year transition period.

The MP for North East Somerset is set to make a speech on Thursday evening calling for a "fundamental" change to the government's tone on Brexit.

He will describe close alignment between the UK and EU after Brexit as unacceptable and urge the government to not keep Britain in the customs union.

"The government's tone on Brexit needs to fundamentally change. If [Brexit's opportunities are] taken off the table then Brexit becomes only a damage limitation exercise," he is set to say.

"The British people did not vote for that. They didn't vote for management of decline."

This collision between the Conservative Party's soft and hard Brexiteers comes amid more speculation about May's future as party leader.

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